Premiums firm in top hubs as demand eases in By Reuters

By Rajendra Jadhav and Ashitha Shivaprasad

(Reuters) – Gold demand in India rose this week on a price correction, although market volatility prompted some buyers to delay purchases, while premiums in China firmed for some haven purchases.

“There is a lot of pent-up demand in the market. Buyers were desperately waiting for a price correction. Since prices have corrected, they are coming out ahead,” said a bullion dealer in Mumbai.

“However, wide price swings also confuse buyers.”

Domestic prices in India were around 69,600 rupees per 10 grams on Friday, after touching a four-month low of 67,400 rupees on 25 July.

Dealers charged a premium of up to $9 an ounce over official domestic prices, including 6 percent import and 3 percent sales taxes, compared with last week’s $7 premium.

Prices have corrected just before the start of the festival season this month and the industry is expecting good orders during the India International Jewelery Show in Mumbai, a New Delhi-based dealer said.

Dealers in China sold gold flat at $18 premium, compared with last week’s $2 discount to $8 premium.

Retail gold jewelry sales in China remain subdued, but there is increased interest in gold bullion as a safe-haven asset, said Bernard Sin, regional director of Greater China at MKS PAMP.

China’s central bank stopped buying gold for the third consecutive month in July. Most analysts believe there will be a resumption of buying, but a few expect the pause to continue for several more months.

Japanese dealers sold gold at premiums of $0.25 to $1.

Earlier this week, when Japanese stocks fell sharply, people sold gold to get cash to hedge other assets and then came back when prices fell, dealers said.

In Singapore, bullion sold at par with a premium of $1.25 an ounce, while in Hong Kong, it sold between a discount of $0.5 and a premium of $2.